Questions and answers regarding budget deal "reforms"
Answers from MEA lobbyists about health insurance, retirement and calendar changes
As part of the Oct. 1 budget deal, a number of so-called "reforms" were pushed through the Legislature as a way to balance the budget on the backs of school employees, including:
- SB 418, which attacks public employees' health insurance without saving the state ANY money;
- SB 546 and 547, which slash retirement benefits for new school employees starting next summer, making it harder to recruit and retain the best and brightest employees for Michigan's students; and
- SB 549, which requires intermediate school districts (ISDs) to set common spring and winter breaks without any consultation with parents or school employees.
Despite extensive media coverage, little has been said about how these changes may impact MEA members. Answers to some frequently asked questions are below. We will share more answers as they become available.
SB 418 - Health insurance changes
Q. Does this legislation void or change my insurance coverage?
A. No. Your insurance is whatever your contract specifies.
Q. Will my insurance change when the contract expires?
A. Only if your bargaining team agrees to a different coverage or carrier.
Q. Does my school district have to join a self-funded pool?
A. The law provides the ability to join a pool; it does not require your district to join a pool.
Q. What effect will the bidding requirement have on bargaining?
A. The impact will vary depending on the stance your district takes. The law only requires a district to get bids. It does not require the district to attempt to bargain over them. All bargaining rights that existed prior to this legislation still are in place.
Q. Does the legislation require that my medical history be disclosed to my employer?
A. The law requires that claims data be furnished to employers who have 100 or more employees in the same insurance plan. It also requires that data from smaller groups in a pool totaling 100 employees must be released. We find this part of the law very troubling, since it will be impossible to maintain privacy with small groups.
Q. How will this legislation impact MESSA?
A. The biggest concern for MESSA is that the mandated release of group-level claims data will lead to "cherry picking" of younger, healthier groups from MESSA's insurance pools. This will make it much more difficult for a pooling strategy to succeed. MESSA is working on how to address this issue.
SB 546-547 - Retirement changes
Q. I am a retired school employee; will my insurance benefits be changed by this law?
A. The legislation only impacts school employees hired after June 30, 2008.
Q. I am currently employed in a school; are my retirement benefits impacted?
A. No. Your benefits are not affected by this legislation.
Q. What is a "graded premium" system?
A. Under a graded premium system, you earn your entitlement to insurance benefits in retirement as you work through your career. In this case, you start with 30 percent entitlement when you vest in the system after 10 years, and then earn 4 percent per year for each subsequent year you work. That maximum insurance premium subsidy you are entitled to earn is 90 percent of the total insurance cost. The legislation will implement this system for new hires after June 30, 2008.
Q. As a school employee, am I going to have to pay more for my Member Investment Plan (MIP) contribution?
A. This part of the legislation only impacts employees hired after July 1, 2008. Those employees will have to pay approximately 2 percent more -- or about 6 percent of their salary -- into the retirement system.
Q. Will new employees get more or different benefits for the additional contribution?
A. No. The MIP benefits did not change.
Q. How does this legislation affect service credit purchases?
A. Service credit purchases for new employees will be affected in two ways. First, they can't purchase service credit for the first two years of employment. Second, they will not be able to use any purchased service credit to quality for health insurance in retirement.
SB 549 - Common calendar requirements
Q. I have heard that the Intermediate School District (ISD) is going to set the school calendar for my district. What happens to our negotiated school calendar?
A. The legislation only allows ISDs to set common dates for the winter holiday and spring break. Those dates under your negotiated school calendar cannot change until your current contract expires.
Q. Does this legislation impact our professional development days?
A. It encourages coordination of professional development days, but it does not require common professional development.
Q. My school district is on trimesters, and we are the only ones in the ISD that have trimester scheduling. What if our breaks don't line up with the ISD?
A. The legislation specifically grants exceptions for trimesters and year-round programs. In addition, it allows for a waiver process from the state superintendent of public instruction for other circumstances.
Q. What does the legislation require of my local school district?
A. Your school board must ensure that your local school calendar in future contracts complies with the identified breaks in the ISD calendar.